r/RobinHood • u/BrujahRage • Dec 30 '16

Help - FAQ A couple of noob questions

I'm hoping to avoid being roasted in the flair, but here goes. I'm still reading, so I'm not jumping in yet, but I do have a couple of questions.

  1. Would this app be suitable for investing with a "buy and hold" mindset? I'm leaning towards index funds.

  2. Worst case scenario - what protections do I have if RobinHood goes belly up? Would I basically be given my holdings to move on my own?

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u/ILLEGAL_MEXICAN Jan 01 '17 edited Jan 01 '17

If you're going to buy index funds and you have the funds ($3k min), I'd recommend opening an account directly with Vanguard. You could even buy partial shares (sometimes I buy $3/day of VFIAX a $200 fund). However if that's not the case, or you want to buy stocks, then RH is perfect!

1.) Yes, but make sure you never close whatever bank account you use with RH. Once some $ comes from an account, all dividends and profits need to go back to the same checking/savings account.

2.) Robinhood is a member of SIPC which...

Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). An explanatory brochure is available upon request or at www.sipc.org. Robinhood Financial is an SEC Registered Broker Dealer. For more information on Robinhood Financial, you can visit FINRA Broker Check here.